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The mutual fund industry is well regulated industry. All funds are registered with SEBI i.e. the Security Exchange Board of India which lays down the rules to protect the investor’s interest. This enables a regulated investment environment in the industry.

To protect the interests of the investors, SEBI formulates policies and regulates the mutual funds. It notified regulations in 1993, fully revised in 1996 and issues guidelines from time to time. Mutual fund either promoted by public or by private sector entities including one promoted from foreign entities is governed by these regulations. SEBI approves the asset management company’s AMC who manages the fund by making investments in various types of securities. The custodians registered with SEBI holds the securities of various schemes of the funds in its custody.

According to SEBI regulations, 2/3rd of the Directors of the Trustee Company or Board of trustees must be independent. According to SEBI regulations, 2/3rd of the Directors of the Trustee Company or Board of

trustees must be independent. The AMFI (Association of Mutual fund industry in India) re-assures the investors in units of mutual funds and the mutual fund functions within the restricted regulatory framework. Objective of AMFI is to increase public awareness of the mutual fund industry.

Hence, an investor before looking for investments into mutual funds has to furnish some documents which are related as the KYC compliance. Known as ‘Know your client’ form.

The form takes into consideration an investor’s name, his date of birth, nationality and details of his PAN Card and a Passport size photograph, which has to be duly signed across the photo.

The form would also require his address details and his contact details and a proof of them which could be your telephone or electricity bill, the passport or driving license or the latest Bank Statement or even the voter ID Card can also work as the proof of address for the correspondence. The investor is also required to put up his income details and his occupation details in this form.

When the client furnishes all the related documents that requires as a proof for this KYC Form or the Application Form, this form needs to be attested by Gazette Officer or the Attorney and then is furnished to the AMC or the intermediates that help in preceding the KYC compliances certification.

Why do we need this KYC?

Well, the KYC is meant to enable a person to comply with the client identification program which has been laid down by the preventing of Money Laundering Act, 2002.

To furnish that, there is an application form, which is known as the KYC Form, which needs to be filled up properly as laid in the instructions of the form. The form is only meant for providing information and documents required for KYC compliance.

Any applicant who wishes to invest into mutual funds has to be KYC-compliant while investing with any SEBI registered Mutual Fund.
Any subscription to the Mutual Fund units may be made only after obtaining the KYC acknowledgement.

Now at the time of investments, the investor has to attach this KYC acknowledgement, which he receives. In case the investments is on a joint holding basis, then also both the joint holders have to individually get their KYC compliance done and whenever they invest into the mutual fund, they have to separately attach the KYC acknowledgement with the investment application form of any mutual fund.

Whereas in case a minor, the guardian of that minor should be KYC compliant and should attach the KYC acknowledgement while investing in the name of the minor.

Although the KYC compliance norms is required for any investor, who is investing into a mutual fund for an amount of Rs.50,000/- and above, but I would recommend that all investors who invest into mutual fund industry, should get their KYC compliance done in the first place. Therefore, for any investment for any person a major, a minor, a single holder or a joint holder a partnership firm an HUF any board or a body/company or corporation for that all are permissible to invest into mutual funds only when their KYC compliance is complete.

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